If you are in debt you don’t need anyone to tell you how incredibly stressful and limiting it is. Often, it can seem impossible to pay down your debts. But it is your responsibility, and you’re going to tackle it!
Getting out of debt means lots of things, most importantly, 1) freedom and 2) the ability to start savings for essential things, like retirement, and establishing an emergency fund. Because continuing to live with debt will continue to eat up any possible gains you might have otherwise collected. Because you are ready to be rid of it. Because even if it’s a big, hairy mess you don’t want to think about, you are brave, and you are going to face reality and look the situation square in the face. You are going to make a plan.
There are a couple methods of debt pay down you can choose between, like 1) paying off the highest interest rate loans first, while paying the minimums on all the rest, and then as you pay off each one, rolling that amount into the next highest interest rate loan, again and again, until you are free and clear, or 2) doing the same thing, but starting with the smallest balance. While it generally makes the most financial sense to start with the highest interest rate (so you save yourself the most money) some people really like starting with the smallest balance, so they start knocking the loans out more quickly. Either way, a plan is essential. Get started by using the sample calulator below.
( CLICK TO DOWNLOAD – this calculator is on the first tab )
Disclaimer: All calculators are blank and intended for you to use on your own. All posts in the “Family Finance” series are general posts of an educational nature. None of this represents specific financial advice.